OREANDA-NEWS. September 26, 2007. A decision has been made to expand the cooperation between SCM and Smart-Holding in the mining and metal sector. This decision arose from discussions between the two companies on the joint modernization of the Makeyevka Metal Plant. The merger of the mining and metal assets of SCM and three enterprises of Smart-Holding is expected soon. This will result in Smart-Holding becoming the second shareholder in of SCM’s metal and mining business, Metinvest, and in Smart-Holding handing over its shares in Makeyevka Metal Plant, Inguletskiy Mining and Processing Plant, as well as a rolling mill, Promet Steel (Bulgaria). The agreements will be carried out in full compliance with current legislation. The merger is expected to be completed by the end of 2007 helping strengthen the position of the Ukrainian mining and metal industry on global markets, which is a necessary prerequisite for growth of the Ukrainian economy, and will increase the country’s economic security.

“Integration of the new enterprises into Metinvest is in line with the development strategy of our mining and metal business and opens up new growth opportunities for the business. As a result, production of cast iron and steel will increase ensuring more efficient consumption of our raw material resources. Taking advantage of new opportunities will help to increase the business value of Metinvest”, said CEO of SCM, Oleg Popov. “Apart from the economic sense, the common views of our future partner and ourselves on social responsibility, business development strategy, and business philosophy were important elements in making the decision. Constant business growth of the Holding will obviously lead to higher earnings for employees at Metinvest’s enterprises and increased income for cities where it operates”.

“We are creating a global player that will be one of the leading mining and metal businesses in the world. This will help improve the global competitiveness of our business and of the whole mining and metal sector in Ukraine”, believes Director for Strategy and Corporate Development at Smart-Holding, Aleksey Pertin. In his opinion, “the merger of mining and metal assets under the aegis of Metinvest will achieve a strong synergy effect”.

“As soon as the merger and integration of the metal assets of Smart-Holding is completed, we intend to amend our production plans to raise production volumes. So, Metinvest Group steel production will double within ten years. By investing in facilities modernization, we are going to turn Makeyevka Metal Plant into a company that meets all international standards. Our experience in development of Ukrainian steel enterprises will help us achieve this objective within the optimal time. By investing billions of dollars, we will establish a modern company and new jobs, as well as ensure good wages and stable income of budgets at all levels”, said Igor Syry, CEO of Metinvest. “At the same time we will get additional rolling facilities in the EU, and thus, expand access to this fast-growing market”.